People find it difficult to understand concepts of blockchain technology and the existence of virtual money. New terms and phrases make it all the more complex for new users to acclimatize. We will try to decode a few words of the crypto world, which has a market cap of over 1.95 trillion dollars.
Some widely used cryptocurrency terms:
Blockchain:
Blockchain is one of the most used words in association with crypto. It is a complex technology that requires intense research to understand completely. Blockchain technology is the foundation stone of the cryptocurrency market.
To simplify for common users like us; all transactions of virtual currencies are made up of ‘blocks’. When one block has data, a new block automatically makes room for storing further information. The information of one block depends on the previous block’s knowledge, thus connecting all the blocks as a ‘chain’. This chain of blocks contains all the information regarding a particular cryptocurrency. Therefore these details are highly protected. The data is copied and replaced across different computers and servers around the world anonymously.
Address:
Just like IP addresses, different users look at things by their unique e-wallet addresses on the blockchain. A person cannot be traced from a lecture, respecting the anonymity of the platforms.
DeFi:
DeFi stands for Decentralized Finance.
All financial operations like banking, insurance, money management, payment transfer, anonymous transactions, etc., fall under decentralized finance. The services related to such decentralized operations are called DeFi services.
Mining:
This term is prevalent for Bitcoin, the first virtual currency of its kind. A finite number of bitcoins exist, like gold (21 million). Thus, Bitcoin extraction from blocks is known as mining, similar to gold. Presently mining one block of Bitcoin sends 6.25 bitcoins into circulation. Mining requires high-tech computers and exceptional problem solving skills.
Hodl:
It expands to ‘Hold On for Dear Life’, or just ‘hold’ misspelt. It refers to the act of holding on to a purchase quantity (in the crypto market) for a long time it respective of the fluctuations of the market. Holding may result in temporary loss, but Hodlers claim that in the long run, it is exceptionally profitable, on a large scale.
FUD:
Its full form is ‘Fear, Uncertainty, and Doubt’. It can be generalized as the misinformation spread by traders regarding a certain currency, which leads to the fall of its value. Dogecoin investors have been victims of FUD.
AltCoin:
Any e-currency except Bitcoin is known as AltCoin. Since 2011, hundreds of such alternate coins are not unknown to the market.
Whale:
The wealthiest bitcoin addresses are called whales. It is similar to the reference of big investors as ‘sharks’. Only three such whale addresses own more than 100,000 bitcoins each.
Gas:
A fee is always present for each transaction on the blockchain. This money goes to the miner from whom you are buying the tokens. Higher amounts correspond to faster transactions. The miner charges this amount, owing to the hefty electricity bills generated from mining through high-tech computers.
Public/Private Keys:
A wallet-holder uses a private key to access their digital currency, while a public key is an address to receive the same. You can share your public key for transactions, but the private key is private and not for sharing!
White Paper:
The official documents related to a token that describes its underlying technology are known as its White Papers’. These increase the transparency of a ticket. In case you need more information, please check this bitcoin trading software!
Billionaires like Elon Musk accepted the legitimacy of cryptocurrency. To remain updated with world finance, you need to know the basics of the crypto world. Trading in cryptocurrency has become extremely easy in the last few years. All you need is a smartphone to start your journey. We suggest thorough research from your end before you decide to invest in this rapidly growing but volatile market. We hope this article will be able to contribute some insight towards that.